Silicon Valley Bank has been shut down by the California Department of Financial Protection and Innovation.
The FDIC-insured crypto-friendly bank was shut down by the banking regulator due to inadequate liquidity and insolvency.
Trading of the bank’s stock was suspended earlier today following a 66% slump in pre-market trading.
Crypto firms including Binance and Immutable have confirmed that they have no exposure to SVB.
Silicon Valley Bank has been shut down by banking regulators in the state of California. In what is being called the largest banking failure since the financial crisis, the SVB Financial Group was closed by the California Department of Financial Protection and Innovation (DFPI). The banking regulator took possession of the bank earlier today, making it the second crypto-friendly to shut shop this week, following Silvergate Bank‘s voluntary liquidation.
DFPI: Silicon Valley Bank had inadequate liquidity
According to a press release by the DFPI, Silicon Valley Bank had inadequate liquidity. The California banking regulator cited insolvency as another factor for taking possession of the FDIC-insured bank, pursuant to California Financial Code section 592. The U.S. Federal Deposit Insurance Corporation has been appointed as the receiver of the crypto-friendly bank.
The FDIC has created the Deposit Insurance National Bank of Santa Clara (DINB). At the time of SVB’s closing, all insured deposits of the bank were immediately transferred to DINB. As per a statement from the FDIC, depositors of Silicon Valley Bank will have full access to their insured deposits no later than 13 March 2023. The FDIC will be responsible for selling off the bank’s assets and distributing payments to uninsured depositors.
The FDIC will pay uninsured depositors an advance dividend within the next week. Uninsured depositors will receive a receivership certificate for the remaining amount of their uninsured funds.”
Federal Deposit Insurance Corporation
The trading of Silicon Valley Bank’s stock on NASDAQ was suspended earlier today after its price fell as much as 66% in pre-market trading. The share price was $106.04 at previous close. As of 31 December 2022, the bank had total deposits of approximately $209 billion and total deposits of approximately $175.4 billion.
Binance Chief Changpeng Zhao confirmed on Twitter that his firm had no exposure to SVB. Leading web3 firm Immutable also confirmed that it had no exposure to the shuttered bank. However, USD Coin issuer Circle does have an undisclosed sum deposited in Silicon Valley Bank.